(this article was originally published in kapta systems blog, March 5, 2012)
In talking to CEO’s, CFO’s, and COO’s of startups regarding organizational strategy, common statements I’ve heard include: “I know that ‘HR issues’ tend to become more frequent when companies get bigger”, “We want to make sure we’re compliant”, and “We really need to get some metrics” without understanding what next steps to take to help get these and larger organizational goals achieved.
A recent conversation with a recruiter at one such company elicited the following exasperated statement: “We’re growing so fast we just can’t keep our heads above water!”
If this is your experience, it’s time to take a step back, and think about your overall HR strategy and infrastructure beyond the simple compensation, stock incentive, and hiring/firing issues. Framing a clear HR strategy will help support attraction, retention and management during this volatile phase of your organization’s formation.
Preparing for Growth:
If a company is growing rapidly and is already topping 50-150 employees, it’s probably time to consider hiring an HR Director or very experienced Manager/Generalist (in addition to the Coordinator/Office Manager you may already have on staff), depending on the rate of headcount growth and current organizational structure.
Additionally, a number of strategic questions need to be answered when considering how sophisticated your HR programs need to be at this point. These include:
-Pace of headcount growth
-Projected headcount growth over the next 12 months, then potentially over the next 3-5 years
-Acquisition: does the leadership have an exit strategy that involves acquisition, or is the company’s plan to acquire smaller organizations as part of its growth strategy?
-Complexity of organization: What is the industry dictating? Does the business provide a service and/or have a sales team? Does it operate in multiple locations or internationally?
It’s time to start looking at formal policies, practices, and the technology that needs to be in place to support growth and transformation, to help analyze ongoing attrition and performance issues. Putting these things in place doesn’t happen overnight – it can take 6 months to a year to get the basic policies, processes, and programs designed and up and running to make sure your company’s growth can continue smoothly.